# In the matter of Kosas Industries Private Limited CP (IB) No.1446-MB-IV-2020

> NCLT judgment dated 2023-02-09. Citation: TCN-2023-NCLT-04692. The case involves an application filed by State Bank of India (SBI), the Financial Creditor,…

- **Court:** NCLT
- **Order date:** 9 Feb 2023
- **Citation:** TCN-2023-NCLT-04692
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kosas-industries-private-limited-cp-ib-no1446-mb-iv-2020-9e2c370d

## Summary

### Background

The case involves an application filed by State Bank of India (SBI), the Financial Creditor, under Section 7 of the Insolvency & Bankruptcy Code (I&B Code), 2016, against Kosas Industries Private Limited, the Corporate Debtor, for initiating the Corporate Insolvency Resolution Process (CIRP). SBI claimed a default of Rs. 98,19,09,715.15 as of 30.10.2020. The Corporate Debtor opposed the application, arguing that it was not maintainable, filed by an unauthorized person, and time-barred. The Corporate Debtor also contended that the Financial Creditor had clubbed several distinct financial debts into a single application. The Financial Creditor sanctioned Fund Based Working Facility (FBWC) to the Corporate Debtor vide Sanction Letter dated 07.02.2011. The said

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## Facts

State Bank of India (SBI) filed an application under Section 7 of the Insolvency & Bankruptcy Code (IBC) to initiate Corporate Insolvency Resolution Process (CIRP) against Kosas Industries Private Limited, claiming a default of Rs. 98,19,09,715.15 as of 30.10.2020. SBI had sanctioned a Fund Based Working Facility (FBWC) to Kosas Industries on 07.02.2011, which was subsequently renewed and enhanced. The Corporate Debtor proposed an OTS (One-Time Settlement) on 06.12.2021 to settle the accounts for Rs. 8,00,00,000. SBI issued a Loan Recall Notice on 10.05.2019, claiming Rs. 81,22,40,826 due as of 09.05.2019. The NeSL report submitted by SBI showed an outstanding amount of Rs. 11,92,91,014 and a date of default as 30.09.2015. Kosas Industries argued that the

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## Issues and analysis

### Issue 1: Whether the application filed by the Financial Creditor under Section 7 of the Insolvency & …

**Ratio:** The application under Section 7 must be filed within the prescribed limitation period

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**Reasoning:** The NCLT observed that the Financial Creditor failed to prove the date of default as

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**Interpretation:** Section 7 of the IBC allows a financial creditor to initiate CIRP against a

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**Application:** The NCLT found that the application was time-barred, as it was filed more than

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## Parties

- **Judges:** Manoj Kumar…; KISHORE VEMULAPALL…
- **Appellants:** State Bank of…
- **Respondents:** Kosas Industries…

## Timeline

- **2011-02-07 — Sanction o…**: Financial Creditor sanctioned Fund Based…
- **2015-02-07 — Renewal of Credit…**: The said facility was lastly renewed and enhanced by the Financial Creditor vide…

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